Report: Are Redfin buyers better negotiators?

Redfin customers in Seattle and San Francisco paid less for their homes than those who purchased homes through other brokers in those regions, according to a report released today by the Seattle online real estate company.

The company doesn’t know for sure, but speculates that it may be because their customers are cost-conscious and more willing to look for homes where the price is negotiable. Furthermore, the company said that the compensation of its agents — who receive bonuses based on customer satisfaction reports rather than commissions — may be a factor in the lower prices.

This is the second year in a row that Redfin has released detailed figures about its business, though this report includes data from the San Francisco Bay Area in addition to King County.

Among the other findings:

A third of Redfin’s customers work in the technology industry, down from 48 percent for the prior period.

Eighty-eight percent of Redfin’s home buyers are between the ages of 18 and 45.

Forty-five percent of Redfin’s customers used the service to purchase a first home, up from 37 percent.

Thirty-six percent of customers visit the Web site through word-of-mouth.

From Feb. 6, 2007, to Feb. 5, 2008, Redfin sold 470 homes in King County, 31 homes in San Francisco County and 36 homes in Santa Clara County.

I also had the chance to ask Redfin Chief Executive Glenn Kelman about the growth of the business during these uncertain times. While some regions have shown profits, Kelman said none has consistently run in the black. Kelman also addressed the impact of a possible recession. Here’s what he had to say:

The real estate market is in the dumps. We figure revenue growth will be slower this year overall and especially in Seattle, but markets like Washington, D.C., and LA are finally taking off. What we’re really worried about is the gross margin on each real estate transaction: buyers are in no hurry now to close on a deal and deals are taking longer to close. But figuring out how to deal with demand is a good problem to have. Redfin traffic has been growing very quickly, 88% in the past three months, in part because of new features like neighborhood outlines and price-history analytics, in part due to the onset of the home-buying season.